In our last blog post, we explained the importance of a good configure-price-quote process (CPQ) for improving B2B sales. In this blog we’ll talk about overcoming the challenges that this presents.
In the past, all service providers had inefficient CPQ. They made larger profit margins on fewer products so it wasn’t a crucial investment. But legacy CPQ systems can’t manage the increasing complexity, range, and volume of telco and non-telco products that CSPs now sell.
Today, more CSPs are interested in improving their CPQ, thanks to increased competition, rising customer expectations, and rising CPQ standards. But that doesn’t mean they’re succeeding. Here’s why:
It’s Not a Priority
Since CSPs have limited amounts of time, budget and manpower, investment and corporate effort are usually concentrated on more popular areas, such as networks, new LoBs, CRM or billing. Executives forget that CPQ processes are not just internal processes, but are one of the first touch points that a customer has with an organization. Internal structural organization only exacerbates this lack of prioritization: CPQ affects Sales and Business, but Operations are the ones who need to allocate their limited resources to improving it. To fix this, the CFO needs to get involved and break this impasse.
Impacts are Hard to Measure
It can be very hard to capture the full range of concrete, negative consequences of poor CPQ. In fact, many CSPs don’t even use the KPIs that would measure it in the first place. Without that data, many organizations simply chalk up lower revenues to underperformance from the sales team. To fix this, service providers need to establish the right metrics to measure CPQ, such as service level guarantees and customer experience indicators, and monitor their impact on revenues.
The Focus is Too Narrow
Perhaps one of the most common reasons why there has been insufficient progress in fixing CPQ problems is that CSPs have adopted inappropriate methodologies or approaches to resolving their problems, like the Kaizen method. This method was simply not designed to resolve the type of complexity seen in B2B enquiry-to-cash or enquiry-to-fulfill processes, and leads to tremendous wasted effort. It often results in moving problems around from one part of the process to another, or even transplanting the root cause of the problem into the solution it suggests. To fix this, CSPs can work backward, starting from the customer perspective and designing a process that meets their needs and expectations.
Poor CPQ can hinder business innovation and expansion, particularly in the growing B2B market, by making it harder for sales teams to understand the full range of products available or to identify upsell and cross-sell opportunities. Overcoming these challenges is one way to get the B2B ball rolling.
To learn more about the damage that poor CPQ causes, tune into our webinar on September 21.